- How Acid-Test Ratios Are Used in Business and Investing
The acid-test ratio is a financial metric that assesses a company’s ability to cover short-term liabilities with its most liquid assets. A higher acid-test ratio suggests a stronger liquidity position, while a lower ratio may indicate potential cash flow challenges. Investors and analysts use this metric to assess financial health, particularly in industries where inventory… read more…
- What Is Cash Basis Accounting for Individuals and Businesses?
Cash basis accounting records when cash actually changes hands in a transaction, providing a real-time view of your financial position that reflects the actual cash flow of a business or individual. While straightforward and easy to understand, it doesn’t account for any pending transactions that may be important to future cash flow and forecasting. Whether… read more…
- How Off-Balance Sheet Financing Works for Small Businesses
Business owners often look for ways to manage their finances while keeping a healthy balance sheet. Off-balance sheet financing has become a popular method for this purpose. It allows businesses to exclude certain assets and liabilities from their balance sheets, which can make the company appear healthier financially and more attractive to investors and lenders.… read more…
- Due Diligence Checklist for Buying a Small Business
When buying a small business, a due diligence checklist can help you evaluate its financial statements, contracts and existing liabilities. Reviewing the legal standing of the business, including licenses and regulatory compliance, can give you a clearer picture of its viability and any potential risks. This checklist helps buyers make informed decisions, thereby minimizing surprises… read more…
- How to Manage Passive Income as a Restaurant Owner
Managing passive income as a restaurant owner can enhance your financial stability and help you grow your business. If your restaurant is not yet generating passive income, you can try implementing strategies that can generate revenue for your business without active day-to-day involvement. Then, once you have passive income, you can manage it to build… read more…
- Financial Planning vs. Financial Forecasting for Businesses
Financial planning and financial forecasting are essential yet distinct components of business strategy. Financial planning involves setting long-term goals and creating a roadmap to achieve them. This process includes budgeting, investment strategies and risk management, all tailored to align with the company’s vision. On the other hand, financial forecasting focuses on predicting future financial outcomes… read more…
- How to Protect Your Assets From a Lawsuit in California
Methods for protecting assets from lawsuits in California include shifting ownership into legal entities such as trusts, taking advantage of legal protections for homesteads and retirement accounts, and maintaining appropriate insurance coverage. Business owners can protect business assets with the help of a legal business structure, such as a Limited Liability Company (LLC). Often, multiple… read more…